The Financial Impacts of Corporate Social Responsibility
(Sprache: Englisch)
Corporate Social Responsibility (CSR) is probably one of the most current and evolving issues within the business world today. There is extensive research in to the financial impacts that CSR has upon a business, yet the outcome remains inconclusive due to...
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Corporate Social Responsibility (CSR) is probably one of the most current and evolving issues within the business world today. There is extensive research in to the financial impacts that CSR has upon a business, yet the outcome remains inconclusive due to contradicting findings. This Independent Learning Project presents many of these contentious financial impacts through a literature review. The primary research then focuses on attempts to contribute to current research by questioning employees at a company with a high level of environmental CSR, to discover if it is a determining factor in terms of their recruitment. An online questionnaire has been used to gain information from 66 respondents regarding their opinions and experiences upon environmental aspects when seeking a new job. The research concludes that employees deem environmental aspects of a business to be relevant when applying for a role, yet the majority do not actively seek to find information regarding it, thus overstating its importance through their opinions. Furthermore, the research indicates that utilitarian aspects are rated of higher importance. This may be a result of difficult financial times.
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Chapter CSR and Financial Impacts:There is a definite evolution within CSR theories, along with a growing coupling between CSR and Financial Performance. In the early years it was deemed insignificant by some, such as Friedman, but this argument does now seem outdated. Research produced by Context (2006) (see Crane et al, 2006, p4) shows that 90% of the largest European companies disclose a large amount of information on social and environmental impacts. Furthermore, KPMG (2005) (see Crane et al, 2006, p4) found that 50% of large global businesses produce a report with the purpose of disclosing CSR related information. This shows a large and ever growing real world backing for the topic which seems to out-rule CSR critics. As such it is widely believed that CSR matters (Hopkins, 2003). In that respect, the debate is no longer about whether there is a demand for CSR within the business world, but how much demand there is for it, especially in relation to the financial impacts that surround it.
There is a vast amount of modern literature that suggests that CSR can benefit a business s profitability, and that taking the initiative in terms of environmental management can result in a competitive advantage (Lee, 2007). 82% of businesses questioned by Boston College s, US Chamber of Commerce and Corporate Citizenship Centre, believe that upright corporate citizenship assists profitability (Rochlin et al, 2004). There has been growing investigation in to the financial benefits of CSR. Schuler and Cording (2006) produced a model which showed and explained relationships between CSR and consumer purchasing. Kanter (1999) argues that well-doing can enhance business reputation and in turn customer loyalty. Kolter and Lee (2005) (see Lee, 2007) suggest that CSR can attract socially conscious consumers and good employees. Finally, Epstein (2009, p22) suggests that, Sustainability can also create financial value for the corporation through enhanced revenues and lower costs .
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These theories and studies do seem to suggest that CSR can result in positive financial impacts on businesses. To this end, the question that current literature seems to propose is how does CSR impact on financials? This leads us to the issue that is apparent in current research, which is the difficulty of measuring those financial impacts.
Chapter Mediating metrics:
Finally, mediating metrics are those that come before both intermediate and end state, which ultimately impact on both of the above stages. It is argued that managers benefit more from metrics that are applied closer to CSR initiatives (Peloza 2009).
A relatively simple mediating metric, in terms of calculation and measurement is cost savings. A metric such as this allows researchers to pin point exactly how CSR is contributing to a business. Savings in terms of energy consumption is one example of this. From viewing company websites, it is apparent that many companies record these savings themselves. British Airways state that the company has saved Pds. 1.5m in fuel burn since July 2010, through reduced use of Auxiliary Power Units (British Airways, 2011). This information, generated within British Airways corporate responsibility report, shows a positive relationship between reduced energy consumption and cost savings. The only common issues with these measures are that the cost of implementing energy consumption schemes is not taken in to account, as is the case with the report of British Airways.
A further mediating metric involves the reputation of a brand in the eyes of customers. This metric differs to the perceptual end state metric because it is directly related to an individual shareholder group. Du, Bhattacharya and Sen (2007) reveal that a brand s social initiatives are related to competitive positioning due to consumer reactions of CSR. Specifically they find that positive consumer CSR beliefs are linked to the likelihood of increased purchasing as well as long-term customer loyalty. The
Chapter Mediating metrics:
Finally, mediating metrics are those that come before both intermediate and end state, which ultimately impact on both of the above stages. It is argued that managers benefit more from metrics that are applied closer to CSR initiatives (Peloza 2009).
A relatively simple mediating metric, in terms of calculation and measurement is cost savings. A metric such as this allows researchers to pin point exactly how CSR is contributing to a business. Savings in terms of energy consumption is one example of this. From viewing company websites, it is apparent that many companies record these savings themselves. British Airways state that the company has saved Pds. 1.5m in fuel burn since July 2010, through reduced use of Auxiliary Power Units (British Airways, 2011). This information, generated within British Airways corporate responsibility report, shows a positive relationship between reduced energy consumption and cost savings. The only common issues with these measures are that the cost of implementing energy consumption schemes is not taken in to account, as is the case with the report of British Airways.
A further mediating metric involves the reputation of a brand in the eyes of customers. This metric differs to the perceptual end state metric because it is directly related to an individual shareholder group. Du, Bhattacharya and Sen (2007) reveal that a brand s social initiatives are related to competitive positioning due to consumer reactions of CSR. Specifically they find that positive consumer CSR beliefs are linked to the likelihood of increased purchasing as well as long-term customer loyalty. The
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Bibliographische Angaben
- Autor: Samuel Williams
- 2014, Erstauflage, 40 Seiten, Maße: 15,5 x 22 cm, Kartoniert (TB), Englisch
- Verlag: Anchor Academic Publishing
- ISBN-10: 3954892561
- ISBN-13: 9783954892563
Sprache:
Englisch
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